Reason for the changes

AB 1412 (Stats. 2013, ch. 546), signed by the Governor on October 4, 2013, retroactively allows the Qualified Small Business Stock (QSBS) deferral and 50 percent gain exclusion for tax years 2008 through 2012.

Impact

This revision may decrease the tax liability for taxpayers who did not report a QSBS exclusion or deferral for taxable years beginning on or after January 1, 2008.

Previous Version

13. Other. Enter the amount, if any, for each item, a through o and enter the total on line 13. See instructions.

13l. Qualified small business stock

13m.

13n.

13o.

13. Add amounts on line a through line o

Line 29q. Qualified small business stock

Line 29r

Line 29s

Line 29t

Line 29, Total Line, Add line a through line t and enter total here

Revised Version

13. Other. Enter the amount, if any, for each item, a through n and enter the total on line 13. See instructions.

Note: text deleted.

13l.

13m.

13n.

13. Add amounts on line a through line n

Note: text deleted.

Line 29q

Line 29r

Line 29s

Line 29, Total Line, Add line a through line s and enter total here

Reason for the changes

The Court of Appeal’s held in Cutler v. Franchise Tax Board (2012) 208 Cal. App. 4th 1247, that the qualified small business stock exclusion and deferral statutes under California Revenue and Taxation Code (R&TC) Sections 18152.5 and 18038.5 are unconstitutional. These sections are now invalid and unenforceable.

Impact

This revision increases the tax liability for taxpayers who reported a qualified small business stock exclusion or deferral for taxable years beginning on or after January 1, 2008.